Plug-In Hybrids Now Included in ATO EV Tax Guidelines Ahead of EOFY

In a significant update for Australian business vehicle owners and fleet operators, the Australian Taxation Office (ATO) has officially included plug-in hybrid vehicles (PHEVs) in its electric vehicle (EV) tax return guidelines — just in time for the end of the financial year (EOFY) on June 30, 2025.

This change comes as PHEVs continue to gain traction across Australia, following a 100.2% year-on-year sales increase in 2024 and a strong presence in 2025, where they currently account for 6.3% of total vehicle sales to the end of March.

What’s New: PHEV Charging Cost Guidelines Introduced

As of May 2025, PHEV owners can now use the ATO’s standard EV home charging rate of 4.20 cents per kilometre to calculate their vehicle’s electricity usage for tax reporting purposes. Previously exclusive to full battery-electric vehicles (BEVs), this charging rate now applies to PHEVs used for business purposes and subject to Fringe Benefits Tax (FBT).

The guideline allows for the following:

• Costing electricity usage from home, workplace, or public charging stations
• Distinction between electricity and petrol/diesel expenses
• Standardised EV rate of 4.20c/km for the electric portion of driving

How to Calculate PHEV Tax Deductions

ATO guidance now allows drivers of plug-in hybrids to break down their travel expenses into petrol-driven kilometres and electric kilometres, with a clear process for calculating costs:

1. Record petrol spend and price per litre Use receipts or calculate from official state averages.
2. Determine litres used Divide total petrol spend by the average fuel cost per litre.
3. Calculate ‘petrol’ kilometres Divide litres used by your vehicle’s official fuel consumption rate.
4. Determine electric kilometres Subtract petrol kilometres from total distance (from the odometer).
5. Apply EV home charging rate Multiply electric kilometres by 4.20 cents to calculate charging cost.
6. Add petrol and electricity costs The total represents your vehicle’s running costs for FBT or business use reporting.

If the driver can’t determine the split between home and commercial charging, the 4.20c/km rate can still be used for the entire electric portion of driving.

EOFY Opportunity for Business Buyers

While the FBT exemption for plug-in hybrids ended on March 31, 2025, this updated ATO guideline ensures PHEV users still have a clear, fair system to claim legitimate business expenses. The full FBT exemption remains in place for battery-electric vehicles, keeping EVs a popular EOFY fleet choice.

With vehicles like the BYD Sealion 6, Toyota RAV4 PHEV (arriving in 2026), and commercial options like the Ford Ranger PHEV, GWM Cannon Alpha, and BYD Shark 6, this update will make it easier for buyers to track and claim vehicle costs accurately.

Take Action Before June 30

As EOFY approaches, now’s the time to review your business vehicle expenses, evaluate tax-deductible kilometres, and ensure you’re ready to maximise your return. Whether you operate a single business vehicle or manage an entire fleet, these new ATO guidelines bring clarity to a fast-growing segment of the market.

Speak to your accountant or tax professional about how these changes affect your personal or business vehicle deductions — especially if you’re driving a PHEV for work.

Want to explore EOFY offers on PHEVs and EVs? Visit your local dealership or browse our latest plug-in hybrid stock available now.

Ensure you search the Tynan stock through our link here.

Credit: CarExpert.com.au